FERC Commissioners warn Senators that U.S. power grids face "reliability challenges"

"FERC has allowed the markets to fall prey to the price-distorting...effects of subsidies...of intermittent renewable renewable resources onto the electric grid"

The video of the entire hearing is here.

U.S. power grids face major “reliability challenges” as soon as this summer, according to members of the Federal Energy Regulatory Commission who testified last Thursday, May 4, 2023, to the Senate Energy and Natural Resources Committee.

The testimony of the FERC Commissioners couldn’t have been any clearer:

We face unprecedented challenges to the reliability of our nation’s electric system, said FERC Acting Chairman Willie Phillips.

There is a looming reliability crisis in our electricity markets, said FERC Commissioner James Danly.

The United States is heading for a very catastrophic situation in terms of reliability, said FERC Commissioner Mark Christie said.

Growing reliability and resilience challenges from extreme weather and cyber and physical threats require changes to the U.S. grid, remarked FERC Commissioner Allison Clements.

Commissioner Cristie said the main problem is that power plants are being retired at a faster pace than they’re being replaced, pointing to estimates from the PJM Interconnection. In PJM’s February 24, 2023 report, PJM says 40 GW is at risk of retiring by 2030, but only 15.1 GW to 30 GW of accredited capacity to come online to replace it.

The arithmetic doesn’t work,” Christie said. “This problem is coming. It’s coming quickly. The red lights are flashing (emphasis added).

Commissioner Danly said the culprit is subsidized renewable energy, which undermines the economics of coal-fired and natural gas-fired power plants in organized markets:

FERC has allowed the markets to fall prey to the price-distorting and warping effects of subsidies and public policies that have driven the advancement of large quantities of intermittent renewable resources onto the electric system (emphasis added).

My take: While the FERC commissioners had varying opinions about the coming problems with U.S. power grids, Commissioner Danley nailed it with his comment that the singular problem is the “large quantities of intermittent renewable resources (being forced) onto the electric system.” Both the Texas ERCOT grid and the PJM grid have sounded alarms about this very problem. The best way to deal with this problem is to incentivize more natural gas-fired generation to be available when wind and solar fail.

At this very moment, Texas is narrowing in on a plan to ensure that backup power is available when needed by providing zero-interest loans to companies building gas-fired power plants. The Texas House of Representatives has scheduled a hearing for tomorrow, May 10, 2023, to consider SB 2627. This bill replaced SB 6, which provided what many considered an “out-of-market solution” where a few companies would receive help from the state to build plants.

Unfortunately, the tragically misnamed Inflation Reduction Act provides massive subsidies to build even more wind and solar projects, which virtually guarantees that all U.S. power grids will be facing instability problems for decades to come.